Lorillard Tobacco Company

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"Lorillard" redirects here. For other uses, see Lorillard (disambiguation).
Lorillard, Inc.
Type Public
Traded as NYSELO
S&P 500 Component
Industry Tobacco
Founded 1760, in New York, USA
Headquarters Greensboro, NC, U.S.A.
Key people Murray S. Kessler (Chairman, President and CEO)
Revenue Increase $6.46 billion USD (2011)
Operating income Increase $1.89 billion USD (2011)
Net income Increase $1.11 billion USD (2011)
Employees 2,800 (2011)
Website Lorillard.com

Lorillard Tobacco Company is an American tobacco company marketing cigarettes under the brand names Newport, Maverick, Old Gold, Kent, True, Satin, and Max.

History[edit]

The Lorillard hogshead in 1789 featuring a native American smoking
Lorillard Snuff Mill, built 1840, photo 1936

The company is named for Pierre Abraham Lorillard, who founded the company in 1760. In 1899, the American Tobacco Company organized a New Jersey corporation, called the Continental Tobacco Company, that took a controlling interest in many small tobacco companies.[1] By 1910, James Buchanan Duke controlled Lorillard and the American Tobacco Company even as it kept its original name. In 1911, the U.S. Court of Appeals found the American Tobacco Company "in restraint of trade," and issued a Dissolution Decree to the American Tobacco Company, which created the opportunity for Lorillard to become an independent company again.[2][3]

In 1925, Lorillard experienced great transition as Benjamin Lloyd Belt became president. Having been with the company since 1911, Belt made some decisions that made the company profitable. He began to prioritize on promoting the Old Gold brand instead of Beech-Nut chewing tobacco.,[4] using such tactics as Old Gold on Broadway and sponsoring Artie Shaw's program on CBS Radio from November 20, 1938 until November 14, 1939. Belt was still president when he died in 1937.[5]

Billboard in Denver promoting Old Gold cigarettes (May 1972).

Lorillard Tobacco Co. opened a new cigarette plant on East Market St. in Greensboro, NC in 1956, moving cigarette manufacturing from Jersey City, New Jersey and Richmond, VA.

Loews Corporation purchased Lorillard in 1967.

Testifying under oath before Congress in 1994, Lorillard's CEO Andrew Tisch said that he didn't believe that nicotine is addictive nor that cigarette smoking causes cancer.[6]

In 1997, the firm's headquarters moved to Greensboro from New York City.[7] The firm also manufactured cigarettes in Louisville, Kentucky.

In 1997, Lorillard was one of four entities to initiate negotiations leading to the 1998 Master Settlement Agreement between "Big Tobacco" and 46 U.S. states.

Loews created the Carolina Group as a holding company for its tobacco assets in 2002; it proceeded to sell a minority stake in Carolina on the New York Stock Exchange. Carolina was controlled by Loews until May 10, 2006, when Loews Corporation sold 15 million shares of Carolina Group, lowering its holding from a controlling 53.7% to a plurality 46.3%.[8] The sale is valued at approximately $740 million.

In 2008, Lorillard Tobacco was entered into a separation agreement with its parent company Loews, and became an independent publicly traded company.

In order to comply with FDA regulations, Lorillard had until June 22, 2010, to rebrand tobacco products marketed as "Lights", "Ultra-Lights", "Medium", "Mild", "Full Flavor", or similar designations to belie the false impression that some tobacco products are comparatively safe.

In December 2010, a Boston jury returned a $151 million verdict against Lorillard Tobacco Company for giving out free samples of cigarettes to children in urban housing projects in the 1950s.[9] The plaintiff, Marie Evans, was nine when she first received these samples, according to documents filed by her attorneys. She died of lung cancer before trial.[10]

In April 2012, Lorillard purchased privately held electronic cigarette company, Blu eCigs, for $135 million in cash, marking the first foray by the tobacco industry into the electronic cigarette market. The electronic cigarette company had about $30 million in revenue in 2010, with Blu eCigs sold in more than 13,000 retail outlets, including Walgreens and Sheetz.[11]

On July 15, 2014, Reynolds American agreed to buy Lorillard, for $27.4 billion, uniting two of the country’s largest tobacco producers in a bet that bigger is safer in a declining industry.[12] The deal also included the sale of the Kool, Winston, Salem, and blu brands to Imperial Tobacco for $7.1 billion.[13]

Cigarette camp[edit]

Camp Old Gold was one of the American Army camps established near Le Havre, France in World War II. As explained in "Introduction: The Cigarette Camps" at the website, The Cigarette Camps: The U.S. Army Camps in the Le Havre Area:[14][15]

The staging-area camps were named after various brands of American cigarettes; the assembly area camps were named after American cities. The names of cigarettes and cities were chosen for two reasons: First, and primarily, for security. Referring to the camps without an indication of their geographical location went a long way to ensuring that the enemy would not know precisely where they were. Anybody eavesdropping or listening to radio traffic would think that cigarettes were being discussed or the camp was stateside, especially regarding the city camps. Secondly, there was a subtle psychological reason, the premise being that troops heading into battle wouldn't mind staying at a place where cigarettes must be plentiful and troops about to depart for combat would be somehow comforted in places with familiar names of cities back home (Camp Atlanta, Camp Baltimore, Camp New York, and Camp Pittsburgh, among others). By war's end, however, all of the cigarette and city camps were devoted to departees. Many processed liberated American POWs (Prisoners of War) and some even held German POWs for a while.]

Restatement[edit]

On May 8, 2003, the company restated its financial statements in 2002 to reflect an adjustment to the Company's historical accounting for CNA's investment in life settlement contracts and the related revenue recognition. [16] On May 3, 2005, Loews Corp, the holding company of Carolina Group, announced to restate results for prior years to correct CNA's accounting for several reinsurance contracts.[17]

See also[edit]

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